Pages

WHAT WE'RE GONNA TALK

Just like in a cafe, we talk about everything. Nothing heavy. Just talk over a cup of coffee.

Wednesday, February 6, 2013

HAS APPLE LOST ITS COOL?

It's a question that's been asked since Apple rose from the ashes in 2001, a time during which the company has become nothing less than the most valuable in the world. Nevertheless, journalists, analysts and just about everyone else have been champing at the bit to pinpoint the exact moment when the company will lose its imagined Svengali-like grip on the minds of American consumers and Appleapocalypse is upon us.

The latest occasion was Apple's report on the last quarter of 2012, a record quarter that was nonetheless panned by investors sniffing a post-Steve Jobs slowdown and the mass realization that its iPhone finally has a worthy rival in the Samsung Galaxy.

In an interview, technology analyst Rob Enderle stated an entirely conceivable negative outlook for Apple. As Apple combats a saturated U.S. market, Mr. Enderle expects a "continual slide, much like when Jobs left, when it went into a slow then more rapid decline over 10 years."

And he wasn't the only Apple bear. Ricocheting around the web last week was a Wall Street Journal article headlined: "Has Apple Lost Its Cool to Samsung?" CNBC asked "Is Samsung Cooler Than Apple?"

For a marketing world that has been hanging on every Apple move for decades, these are huge questions that seem to herald some sort of new brand order.

They also might be the wrong ones entirely. After all, it's been a long time since Apple has had to worry about issues of cool -- it's a ubiquitous cultural force with little of the underdog feel it had when it was the hip alternative to IBM or Microsoft.

Brand-wise, Apple is these days too often understood as the rebel brand that defined itself against the grim reality of Microsoft products. When it came to music and especially mobile, things changed. Apple didn't position itself against then-dominant BlackBerry, but rather the nonexistence of a beautifully designed, wonderfully functional small computer that's open to a constellation of brilliant software developers and happens to make phone calls. Now Samsung, while hilariously criticizing Apple's stuck-up rep, has rebelled against a reality where the only option for this miraculous sort of device is made by Apple.

Unlike, say, the market for jeans or sneakers or even cars, the world of smartphones seems almost post-cool. Absent a BlackBerry comeback or a Microsoft surge, there are two options right now if you want to carry a wholly modern phone. What we're talking about in the Apple-Samsung showdown is two multinational companies with gigantic marketing budgets effectively waging a market-share battle. Together they own 70% of the U.S. smartphone market.

In this sort of Coke-Pepsi contest, traditional notions of cool go out the window.

Cool, in a marketing context, has historically meant something like a big corporation borrowing -- or preying on -- some sort of underground culture to enhance its appeal. The classic example is the late 1990s club-kid revitalization of Hush Puppies as chronicled by Malcolm Gladwell in "The Tipping Point." But Apple and Samsung aren't Hush Puppies; they're the big dogs.

Exclusivity, a big part of cool in the Gladwellian sense, is something Apple has been parting with. Mr. Enderle observes that following Mr. Jobs' death, Tim Cook "hasn't followed a number of rules that Jobs created to preserve the brand. Part of what makes it cool is exclusivity," he said. "You don't buy cool products at Walmart. High-volume products aren't cool because they're not exclusive. They're not the ones [consumers] lust after. At the very least, Apple's going to be less cool."

This is a common way of thinking about marketing cool, and for certain products, especially luxury goods, it makes all the sense in the world. For phones, not so much. If it did, Samsung would already be uncool and all of us who struggle for coolness would be carrying BlackBerry Torches or Windows phones. Take one of those into your next agency meeting and imagine just how cool you'll look in your co-workers' eyes.

What will true ubiquity mean for Apple? Truly global availability would necessarily be a drag on Apple's profit margins since it would need to appeal to some less-than-affluent consumers in Asia. But it's hard to imagine U.S. consumers getting turned off to the iPhone because there's a cheaper version of it available to consumers here or abroad. If they were that fickle, then Samsung, with its mix of mobile phones that appeal to all rungs on the economic ladder, wouldn't have a chance among the uber-cool consumers.

In the long run, when retention is key, then continuous hardware and software innovation and maintenance of the ecosystem is crucial. As the sides firm up, it may be loyalty that's the most important factor. Late last year, Strategy Analytics found that iPhone loyalty dropped for the first time since the launch of the phone. Eighty-eight percent of owners said they would definitely or probably buy another Apple phone, down from 93% the year before. Most companies would sell their soul for these numbers, but for Apple the drop is worth noting.

Ultimately, missteps like the company's attempt to force its own inferior maps product down its users' throats last year might end up being more important than abstract notions of cool.